Relationship of the EU legal order with WTO law: Studying Judicial Activism
Luca Barani, ULB
GARNET Working Paper No: 70/09
September 2009
ABSTRACT
As International Politics has become increasingly institutionalised since the end of the Cold War, a
fragmented institutional architecture for global governance is being put in place, at differential
degrees according to the issue area.
In this perspective, this paper aims at exploring the interaction between the EU and WTO, from the
angle of their jurisdictional bodies involved in the common pursuit of managing economic
globalization through law. The departing premise of this research project is the recognition that during
the 1990s both the WTO and EU have refined their compulsory implementation mechanisms for their
own rules through a judicialization of the compliance phase. This development tended to favour the
emergence of a more coherent regulatory regime, allowing for the completion of negotiated
agreements by jurisprudential ways.
In other words, the institutional design plays a role in favouring regulatory patterns, even if it creates
potential problems of coordination and coherence between global and regional levels.
Accordingly, the aim of paper is twofold. Firstly, it seeks to demonstrate empirically to what extent
judicial interaction has become an important parameter of trade governance at the global and
European levels. Two results of the interaction between regional and multilateral level need to be
analysed in depth. On the one hand, WTO standards have changed the direction of European
integration as they have progressively been invoked against the EU and national rules of its State
members. On the other hand, the creation of the WTO legal regime has helped to consolidate EU
system of governance and opened an important avenue through which European norms can take root
at the global level.
Secondly, this research project seeks to investigate the underlying social mechanisms of interjurisdictional interactions. The research will illustrate how judicial bodies have been trying to solve
some of the systemic incongruities of their relationship by intruding into each other’s legal orders.
Due to their different jurisdictions, procedures and different rules of conflict resolution, national and
international judges often interpret international trade law from different judicial viewpoints, in the
framework of conflicting ‘constitutional’ perspectives.
The paper will show that, despite their rather turbulent relationship, the judicial bodies and their
judges are in the process of setting up a common framework of coexistence, which, in turn, has
allowed them to build a transnational and pluralistic space of normative dialogue. In fact, the
fragmented nature of national and international legal and dispute settlement regimes, and the
formalistic nature of the customary international law rules on treaty interpretation and conflicts of
laws, offer little guidance on how national and international judges should respond to the proliferation
of competing jurisdictions and the resultant incentives for forum shopping and rule shopping by
governments and non-governmental actors in international economic law.
Keywords: WTO, Direct effect, Court of Justice, Judicial regulation of International Trade
Address for correspondence:
Luca Barani
Institute of European Studies
CP172, Avenue FD Roosevelt 50, 1050 Brussels
Email: Barani@gmail.com
1
Introduction
The rule of law is one of the defining features of the European Union (EU)1. No other
International Organisation enjoys “such a reliably effective supremacy of its law over the
laws of member governments, with a recognised Court to adjudicate disputes”2. Once
overlooked by scholars, European Court of Justice (ECJ) is recognised as an actor and factor
in the process of European Integration3. The ECJ has been widely credited with a central role
in the “constitutionalisation” of the EU legal order, deviating from its international law roots,
under the banner of the rule of law. The jurisprudence of the European Court has resulted, on
the hand, in transforming the original treaty-based relationship between national and
European law and, on the other hand, in remodelling the vertical separation of powers
between the Union and its Member States.
The manner in which the ECJ helped bring about this transformational process has routinely
provoked irate reactions by some Member States, both at the national and supranational
levels4. As a consequence, the European Court of Justice in Luxembourg is often accused of
being excessively "activist" in its judgments. This charge, however, leaves unclear questions
about what activism exactly denotes, at which point the European Court of Justice has
transgressed the limits of its judicial function, and what the consequences should be.
Intervening in this debate, the late Lord Mackenzie-Stuart remarked:
“Commentators, both kind and critical, have frequently referred to the approach of
Court as ‘activist’ and ‘dynamic’, but with great respect I wonder whether these
adjectives do not obscure the issues”5
In spite of the ambiguities of labelling of the Court of Justice as ‘activist’ the charge of
‘activism’ against the ECJ stuck6. Another judge rejected it altogether, however, as part of a
‘conspiracy theory’:
1
Neil Walker, “The Rule of Law and the EU: Necessity's Mixed Virtue” in Neil Walker, Gianluigi Palombella
(eds), Relocating the Rule of Law (London, Hart, 2009), pp. 119-138
2
Robert Keohane, Stanley Hoffmann, “Institutional change in Europe in the 1980s” in Robert Keohane, Stanley
Hoffmann (eds), The new European Community: Decision-making and Institutional Change (Boulder,
Westview, 1991), pp. 10-11
3
Joseph Weiler, «The transformation of Europe», Yale Law Journal 100:8, 1991, pp. 2403-2483
4
Lately, following C-170/96 Commission / Council [1998] I-2763, the Danish Prime Minister Fogh Rasmussen
raised the issue of a renegotiation of the mandate of the Court. The Austrian Chancellor Wolfgang Schüssel, at
the beginning of his EU presidency, criticized the ECJ for its expansive jurisprudence, commenting on C-147/03
Commission / Austria [2005] I-5969
5
Lord Mackenzie-Stuart, The European Communities and the Rule of Law, London, Stevens, 1977, p. 77
6
Hjalte Rasmussen, On Law and Policy in the European Court of Justice (Dordrecht, Martinus Nijhoff, 1986)
2
“The Court cannot have an agenda unless all the judges, or at least a consistent
majority of them, are part to it – presumably in violation of the judicial oath. At the
very least, they are guilty of intellectual dishonesty. Even if their decisions are right,
they commit the greatest treason… The test of a judicial decision is whether it is
legally and intellectually credible as an answer to the problem the judge has been
called upon to resolve.”7
In spite of the strong rebuttals by the judges, the ‘dynamic’ character of the jurisprudence of
the ECJ is still a matter of debate among scholars. After a theoretical discussion of judicial
activism, the paper will focus more specifically on the jurisprudential and doctrinal aspects of
the ECJ relationship with WTO law, before assessing to what extent and how the ECJ has
been activist in the realm of external trade relations of the EU. The conclusion is that the
incoherencies of the Court’s jurisprudence in this domain have been exposed by the learned
community of Community Lawyers but justified in terms of political necessities. This brings
to the question of the persistent bias in favour of pro-integration positions among the
Community lawyers as an epistemic community.
I) Defining Activism
According to Rasmussen, “In terms of methodology, the student of European judicial
activism has, indeed, no choice but to monitor carefully the responses to activism offered by
the Court's political as well as legal, social and economic environments”8. Accordingly, the
jurisprudential trajectory of the Court remains within legitimate boundaries in absence of
widespread negative reactions, notably from Member States.
On the other hand, Weiler objected that: “The Court as guardian of the Treaties...has, of
course within proper limits, a huge responsibility in not allowing that vision and idea, as
incorporated into the Treaties establishing the European Communities, to be destroyed by
contingent political and social negative inputs”9. According to this author, demanding the
adherence of the European Court of Justice to the desiderata of the Member States implies the
risk of a political opportunism of the Court, which is endangering the proper functioning of
an impartial jurisdiction, even if the question of “proper limits” to the jurisprudential
7
David Edward, “Judicial Activism – Myth or Reality?” in A.I.L. Campbell, M. Voyatzi, Legal Reasoning and
Judicial Interpretation, London, Trenton, 1996, pp. 29-67
8
Hjalte Rasmussen, op. cit., p. 7
9
Joseph Weiler, “The Court of Justice on Trial”, Common Market Law Review 24 (1987), p. 570
3
trajectory of the Court remains. At the contrary, “One may…argue with the rationale; but
perceived non-arbitrariness and certainty usually remain hallmarks of proper judicial
function.”10
Following this suggestion, to evaluate the label of ‘activist’ attached to the Court of Justice,
this paper is taking seriously doctrinal assessment of the latter jurisprudence. The main
function performed by a jurisdiction is essentially a creative one, updating and adapting the
body of law at the lights of the facts of a controversy. For this reason, the judges are bound
by a number of professional norms, substantive rules, procedures, and standards of
interpretation and reasoning tests, which are normally used by commentators to evaluate its
jurisprudence. One of the main test of the legitimacy of a court is «whether and by what
consideration its decisions are justified on, or at the very least, rationally justifiable»11. The
doctrinal reactions are deemed to be a valuable indicator if the ECJ’s jurisprudence passes
this test.
The paper maintains that the issue of legitimacy is of essential importance for the future of
the European Union and, more specifically, of its constitutive entities. However, one has to
distinguish the sources of legitimacy of judicial and legislative branch. While the latter is
derived from the democratic process, the former is derived from procedural and substantive
justice. The ECJ as a judicial institution is bound by legal rules, and comprised of individuals
who interpret the law. It is both facilitated and constrained by its relationship with other EU
actors. Judicial interpretation is an inherently tricky function. Judicial interpretation both
empowers and constraints the ECJ.
Interpretation of the law inherently leaves room for creativity; yet judgments must also be
credible answers to the problems the Court has been called upon to resolve. Consequently,
judicial creativity in its interpretative function does not yield unlimited autonomy. The ECJ is
bound by traditional rules of procedure and legal reasoning. Its room of manoeuvre is
constrained by the nature of the actions and arguments brought before it. More structurally,
the ECJ cannot initiate or decline cases. It must rule in all legitimate disputes. Ultimately, its
legitimacy as a judiciary instance depends upon the extent to which its decisions reflect a
10
Ibidem, p. 573
Joxerramon Bengoetxea, Neil MacCormick, Lenor Soriano, “Integration and Integrity in the Legal Reasoning
of the European Cour of Justice” in Grainne De Burca, Joseph Weiler (eds), The European Court of Justice
(Oxford, Oxford University Press, 2001), p. 44
11
4
“reasonable” interpretation of EU law12. Finally, the ECJ is bound by rules of procedure and
constrained by precedent. Usually, the Court “launched its decisions on an unsuspecting
world. [Each one] grew out of previously established case law in response to questions put to
the Court which it was the Court’s function and duty to answer”13.
Using this interpretation of the legitimate bounds of a jurisdiction, the objective of this paper
is to evaluate how and to what extent the ECJ actively pursue its own agenda according to its
preferences, using its discretion. Judicial discretion is measured by the degree of creativity
used in judicial interpretation. It is maintained that the degree of creativity employed by the
Court in its decision-making is an important element of judicial legitimacy. Creativity is
defined here as the extent to which jurisprudential interpretation departs from a generally
accepted consensus, and typified by the reactions of the mainstream doctrine to the rulings of
the ECJ, either in terms of internal inconsistency of the reasoning process or external
assessment of unreasonable results. Operationally, judicial creativity can be defined as the
extent to which the ECJ takes liberty from generally accepted reading of the text of Treaties
or from its previous case law. In itself, however, it is not the amount of interpretative
creativity enjoyed by a jurisdiction which is the measure of its legitimacy, but rather the
degree of acceptance by its designate audience.
The hypothesis at work is that the fewer the legal and political factors which constrain the
Court, the more likely it is to employ a creative interpretation. Conversely, the greater the
constraints, the more conservative the interpretation. Whereas the ECJ interpretation in the
internal context has often been labelled “reckless” because of its disregard of political
constraints, the Court appears to have adopted a more nuanced interpretation in the external
realm, which suggests a judicial pragmatic approach to the complex political and legal issues
facing the EU in the world14. The interpretation of the ECJ on the effects of GATT/WTO law
on the Community legal order is going to be analyzed thereafter at the light of this
hypothesis.
II) Jurisprudence on International Law and its effects on Community Law
The Treaties are silent on the effects of an international agreement, concluded by the EC/EU,
for the European legal order. Normally, this is the ideal situation for the Court to step in and
12
Federico Mancini, “The Making of a Constitution for Europe”, Common Market Law Review 26 (1989), p.
606
13
David Edward, op. cit., p. 35
14
Takis Tridimas, Piet Eeckhout, “The external competence of the Community and the case law of the European
Court of Justice: principle versus pragmatism”, Yearbook of European Law 14 (1994), pp. 143-177
5
“to fill in the details of an incomplete contract and adjudicate future disputes»15. To fill this
gap at the light of actual controversies, the ECJ was called to pronounce itself on the legal
consequences of international agreements properly concluded and ratified. Earlier on, with
the ruling in Haegeman, the Court stated that they were integral part of EC law16, but without
explaining why. The doctrine generally approved of the approach taken by the Court,
attributing it to a monist understanding of the relationship between Community and
International law, which does not require the latter to be transformed in a regulation or a
directive to have effect. Even those scholars who are most inclined to criticise the whole
ECJ’s line of decisions concerning International law are of the view that the wrong principles
have prevailed rather than contending that no principles at all have prevailed17.
However, the European Court of justice seemed to adopt such a monist understanding of the
relationship between International and Community law, without explicitly stating so18. This
implied an important part of judicial discretion, in determining under which criteria
individuals could rely upon an international agreement in order to challenge the legality of a
legal act of the EC/EU. This has the advantage of guaranteeing a comfortable room of
maneuver for the judicial comproms to be struck.
Later on, in what is considered to be the classical locus of its jurisprudence on the matter, the
Court of Justice held in Kupferberger that provisions of agreements concluded by the
Community are part of Community law, binding upon the institutions and Member States.
When a State implements domestically a provision of such an international agreement, it
fulfils EU law obligations. The ECJ concluded that it alone has the authority to determine the
nature of such an obligation and, in particular, whether individuals before national courts can
enforce them19.
15
Mark Pollack, «Delegation, Agency and Agenda Setting in the EC», International Organization 51:1, 1997, p.
104
16
C-181/73 Haegemann [1974] 741
17
Robert Howse, “Adjucative Legitimacy and Treaty Interpretation in International Trade Law: The Early Years
of WTO jurisprudence” in Joseph W. W. Weiler (ed), The EU, the WTO, and the NAFTA: Towards a Common
Law of International Trade (Oxford: Hart, 2000), chapter 3.
18
C-104/81 Hauptzollant Mainz / Kupferberg [1982] 3641. The ECJ concluded that the provision at issue in this
case (the prohibition of discriminatory internal taxation in the Free Trade Agreement with Portugal) was
‘sufficiently precise’ and ‘unconditional’ to be “capable to conferring upon individual traders rights which the
Court must protect”.
19
Marco Bronckers, “The Effect of the WTO in European Court Litigation”, Texas International Law Journal
40 (2005), pp. 443-448
6
Further developing this reasoning in respect of the decisions pertaining to bodies created as
part of international agreements20, the Court recognized in its opinion 1/91 the possibility to
be bound by the decision of a jurisdictional body set up from an international agreement
signed by the EU and Member States21, when called to interpret the international agreement
in question22.
At the light of this ruling, whenever there is a conflict between an international agreement
and the treaties, the former does not take precedence, whereas it is possible that in case of
conflict between an international agreement and inconsistent secondary law, the latter gives
way under article 300 EC, which states that international agreements are binding on the
institutions and Member States. The implication is that the Treaties are the ‘constitutional’
backbone of the European legal order23; a perspective enshrined in the amended article
300(6) EC.
Both principled stances of the ECJ on the relationship with International Law and its
obligatory status in respect of Community law have been stretched by the encounter of the
European Communities with the GATT multilateral system of trade regulation (A), which
made way to a creative rearrangement of the jurisprudential case law using its discretionary
leeway. In particular, the doctrinal view is that there is less willingness on the side of the ECJ
to consider a direct effect of GATT/WTO provisions, in respect of agreements concluded by
the EC with non-Member States24. Moreover, the ECJ has avoided stating that WTO law
forms an integral part of Community Law and avoided this qualification also in relation to the
WTO Agreement. This is even more evident in the twin fields of applicability and
invocability of WTO law and decisions of the WTO dispute settlement system (B).
20
Takis Tridimas, Piet Eeckhout, “The external competence of the Community and the case law of the European
Court of Justice: principle versus pragmatism”, Yearbook of European Law 14 (1994), pp. 149-151. Opinion
1/76 [1977] I-449
21
Ibidem, para. 39-40
22
Marco Bronckers, “The Relationship of the EC Courts with Other International Tribunals: Non-committal,
Respectful or Submissive?”, Common Market Law Review 44 (2007), pp. 601-627; Allan Rosas, “International
Dispute Settlement: EU Practices and Procedures”, German of Yearbook International Law 46 (2003), pp. 284322
23
In Opinion 1/91 [1991] I-6079, EEC Treaty was referred to as “the constitutional charter of a Community
based on the rule of law” para. 21
24
Steve Peers, “Constitutional Problems and International Trade”, European Law Review 24:2 (1998). This
stands in contrast to the case law on preferential agreements concluded by the EU, which the ECJ has held
capable of direct effect in the European legal order. Steve Peers, “Banana Split: WTO law and Preferential
Agreements in the EC Legal Order”, European Foreign Affairs Review 4:2 (1999), pp. 195-214 discussing: C181/73 Haegemann [1974] I-449; C-104/81 Kupferberg [1982] 3641; C-12/86 Demirel [1987] 3719; C-469/93
Chiquita Italia [1995] I-4533.
7
A) The exceptional status of GATT
In contrast to its expansive case law on the direct effect of EU law, the Court has adopted a
narrow view concerning the direct effects of international law, and especially of GATT
provisions, when used against Community law25. Broadly speaking, the ECJ is protecting the
integrity of the European legal order from the encroachment of International law. The criteria
to define the direct effect of provisions of International treaties are formally similar to those
applied for Community law: precision, unconditionality and applicability by a jurisdiction.
Nonetheless, referring to the Convention of Vienna canon of interpretation of International
law, the ECJ puts much emphasis on the context, objective and purpose of the International
treaties to determine the direct applicability of those provisions. This allows the ECJ to avoid
a simple parallelism beween International treaties and European treaties, in favor of a
graduated approach. In the case of the GATT/WTO treaties, however, the ECJ took the
general view that their provisions are incapable of any direct effect, in any circumstance,
having regard to the nature and objective of the treaties in question.
Ten years before Kupferberger, a plaintiff sought to rely on a GATT provision for the
annulment of a Community measure. In International Fruit, the Court held that in order to do
so, the provision in question must not only be binding upon the Community, but also “confer
rights on citizens of the Community on which they can rely before the courts in contesting the
validity of a Community measure”. Referring to the ‘flexibility’ enshrined in GATT
provisions as well as the possibilities for derogation and unilateral withdrawal, the Court
concluded that the functioning of GATT “is not capable of conferring on citizens of the
Community rights which they can invoke before the Courts”26. As a matter of fact, this first
encounter tainted permanently the dealings of the ECJ with GATT/WTO in the light of the
doctrine of direct effect. As an effect of the path dependency of jurisprudential precedent27,
relationship of EC law with GATT/WTO law remained subsequently framed in the
jurisprudential denial of direct effect to the latter28.
25
Francis Snyder, "The Gatekeepers: The European Courts and WTO Law", Common Market Law Review 40:2
(2003), pp. 313-367
26
C-21&C-24/72 International Fruit Company / Produktschap voor Groenten en Fruit [1972] 1219
27
Alec Stone Sweet, “Path Dependence, Precedent, and Judicial Power” in Martin Shapiro, Alec Stone Sweet,
On Law, Politics and Judicialization (Oxford: Oxford University Press, 2002), pp. 112-135
28
Jan Klabbers, “International Law in Community Law: the Law and Politics of Direct Effect”, Yearbook of
European Law 21 (2002), pp. 274-275 and Gerhard Pischel, “Trade, Treaties, and Treason”, European Foreign
Affairs Review 6:1 (2001), p. 110
8
The Court confirmed this view in its ‘bananas’ judgment concerning the 1994 case of
Germany v. Council29, as it regards the legality of EU provision with the GATT, drawing a
parallelism between the positions of Member States and private parties:
“Those features o the GATT, from which the Court concluded that an individual
within the Community cannot invoke it in a court to challenge the lawfulness of a
Community act, also preclude the Court from taking provisions of GATT into
consideration to assess the lawfulness of a regulation in an action brought by a
Member State under the first paragraph of Article 173 of the Treaty”30
Adding hereafter the exception that:
“…only if the Community intended to implement a particular obligation entered into
within the framework of GATT, or if the Community act expressly refers to specific
provision of GATT”31
As a consequence, the European Court of Justice has consistently denied direct effect to
GATT/WTO, with limited exceptions32. In the aforementioned case, therefore, Germany was
unable to challenge the validity of the banana regulation in the light of obligations contracted
by the Community in the GATT framework and provisions, which did not have direct effect
in EU law. Legal scholars criticized the decision of the Court, arguing that it undermined the
GATT system33 and it betrayed the international rule of law34.
In political terms, however, the ECJ’s approach was in line with the negotiating position of
the Council in the WTO framework, which stated in the preamble to the decision of
concluding the WTO agreement, modifying the GATT provisions at the light of the results of
the Uruguay Round negotiations:
29
Norio Komuro, “The EC Banana Regime and Judicial Control”, Journal of World Trade 34:5 (2000), pp. 1-88
C-280/93 Germany v. Council [1994] I-4973, para 109
31
Ibidem, para 111
32
C-69/89 Nakajima [1991] I-2069. So far, the EC Courts have only recognised such exceptions in respect of
the EC's anti-dumping legislation. Marco Bronckers, “Private Appeals to WTO Law: An Update”, Journal of
World Trade 42:2 (2008), pp. 245-260
33
Joanne Scott, “GATT and Community Law” in Jo Shaw, Gillian More, New Legal Dynamics of the European
Union (Oxford, Clarendon Press, 1995), p. 164
34
Kees Jan Kuilwijk, The European Court of Justice and the GATT Dilemma: Public Interest versus Individual
Rights? (Portland, International Specialized Book Service, 1996)
30
9
“By its nature, the Agreement establishing the World trade Organisation, including
the Annexes thereto, is not susceptible to being directly invoked in Community or
Member State courts” 35
In such a way, according to the ECJ, the only effect that GATT/WTO law can have on the
European legal order is indirect, through the obligation of consistent interpretation of EC law
in the light of WTO law36. Nonetheless, the limitations of such a judicial technique are well
known in the field of EC directives. Consistent interpretation requires relevant legislation to
exist and to be sufficiently flexible to be interpreted, absence of a clear conflict between
referred law and the legislation to be interpreted, and finally is less effective than direct effect
in establishing legal certainty37. On the other hand, consistent interpretation has the advantage
of being sensitive to context and flexible as a filter concerning which EC legislation need to
be interpreted according to WTO provisions, increasing the discretion of the judge called to
act as a gatekeeper38.
B) The continuation of the exception for WTO law
The Court confirmed in Portugal v. Council39 that WTO law was to be treated as GATT law.
Overall, the emphasis of the Court’s reasoning has changed slightly since Germany v.
Council. Whereas its principal objection to direct effect for the GATT had been the flexibility
of the legal provisions in question, in the case of the WTO the Court was concerned with the
flexibility of the whole structure of the agreement40 and the necessary freedom of negotiation
in the context of WTO for EU legislative or executive bodies41.
If we look at the reception of this jurisprudential continuity of treatment, it is possible to
document a serious discontinuity in the general doctrine42. There has been an incremental
35
Council Decision 94/800, OJ 1994 L 336, p. 1
C-35/96 Hermés International v. FHT Marketing Choice [1998] I-3603
37
Francis Snyder, op. cit., p. 363
38
Joel Trachtman, Joel Trachtman, “Bananas, Direct Effect and Compliance”, European Journal of
International Law 10:4 (1999), p. 677
39
C-149/96 [1999] I-8935
40
Paul Craig, Grainne de Burca, EU Law: Text, Cases, Materials 3rd Ed. (Oxford: Oxford University Press,
2002), pp. 193-201; Joseph W. W. Weiler (ed), The EU, the WTO, and the NAFTA: Towards a Common Law of
International Trade (Oxford: Hart, 2000); Stephen Weatherill, «The Application of WTO Law in the EC legal
order: Does the European Court of Justice have a Double Standard?», Studi Senesi 1 (2003), pp. 135-160
41
Mario Mendez, “The Impact of WTO rulings in the Community legal order”, European Law Review 29:4
(2004), p. 528
42
Francis Snyder, “The Gatekeepers: the European Courts and WTO law”, Common Market Law Review 40:3
(2003), pp. 313-367; Jan Klabbers, “International Law in Community Law: the Law and Politics of Direct
Effect”, Yearbook of European Law 21 (2002), pp. 263-298; Stefan Griller, “Judicial Enforceability of WTO
law in the European Law”, Journal of International Economic Law (2000), pp. 441-472; Piet Eeckhout,
“Judicial Enforcement of WTO law in the European Union – Some further reflections”, Journal of International
36
10
transition from relative consensus on the views of the ECJ about the GATT to a growing
minority dissenting on the treatment reserved to the WTO agreement, reflected in the
arguments advanced by different Advocate Generals suggesting a re-adjustment of the
established case law of the Court, at least in the field of damages43.
With the entry into force of the WTO, legal scholars hoped that the more developed
institutional features of the WTO would convince the Court to take a broader approach to the
direct effect of WTO provisions44. In the international trade regime at the global level, a dual
process of legalization and judicialization was at work, concerning respectively the
multiplication of legal norms and the strengthening of enforcement mechanisms of these
rules45. In respect of the previous GATT experience46, trade rules developed both in terms of
scope and depth, concerning the possibility of intervention of the new World Trade
Organization. According to the doctrinal analysis, the evolution from GATT to WTO proved
the triumph of jurists over diplomats47, both in terms of procedures and logics48. As Joseph
Weiler has argued, the culture of law has a more pervasive impact on the politics of dispute
resolution at the global level. Turning the process over to lawyers means that controversies
are fought on the basis of their legal merits, and not their political merits. Once the WTO
dispute settlement mechanism is used, as it is increasingly so, the parties’ objective is to win
the case, making diplomatic compromise almost impossible49. The result is that law supplants
diplomacy in resolving the dispute. As a result, commentators talked of two intertwined
processes at work in the WTO framework50. On the one hand, “legalization” designates in the
context of the development of the world trading system the increasing trend of codifying
rules and procedures to cover the deficits in practice and to create a more predictable dispute
Economic Law 4:1 (2002), pp. 91-110; Norio Komuro, “The EC Banana Regime and Judicial Control”, Journal
of World Trade 34:5 (2000), pp. 1-88
43
Armin von Bogdandy, “Legal Effects of World Trade Organization Decisions Within European Union Law:
A Contribution to the Theory of the Legal Acts of International Organizations and the Action for Damages
Under Article 288(2) EC”, Journal of World Trade 39:1 (2005), pp. 54-66; Alessandro Alemanno, “Judicial
enforcement of the WTO ‘hormones’ ruling within the European Community: toward EC liability for the nonimplementation of WTO dispute settlement decisions?”, Harvard International Law Journal (2004), pp. 547561
44
Joel Trachtman, op. cit., pp. 656-657
45
Arie Reich, “From Diplomacy to Law: the Juridicization of International Trade Relations”, Northwestern
Journal of International Law and Business 17, 1997, pp. 776-777
46
Robert Hudec, “The GATT Legal System: A Diplomat’s Jurisprudence”, Journal of World Trade Law 4, 1970
in Robert Hudec, Essays on the Nature of International Trade Law (London, Cameron May, 1999), pp. 17-76
47
Michael Young, “Dispute resolution in the Uruguay Round: Lawyers triumph over Diplomats”, International
Lawyer 29:5 (1995), pp. 389-409
48
Joseph H. H. Weiler, “The rule of lawyers and the ethos of diplomats: reflections on the internal and external
legitimacy of WTO dispute settlement”, Journal of World Trade 35:2 (2001), pp. 191-207
49
Karen Alter, “Resolving or Exacerbating Disputes? The WTO's New Dispute Resolution System,
International Affairs 79:4 (2003), pp. 783-800
50
Ernst-Ulrich Petersmann, The GATT/WTO Dispute Settlement System: International Law, International
Organizations and Dispute Settlement (The Hague, Kluwer, 1997) chapters 2, 5, and 6
11
settlement process. On the other hand, “judicialization” refers in the same context to the
increasing trend of resorting to WTO dispute mechanisms to settle differences, in place of or
in addition to relying on market power and diplomatic negotiations. Both trends can be
summed up by the statement that:
“growing demand by States to regulate their trade relations by using norms and
enforcement procedures that are legal in character, create significant limitations on the
sovereignty of the States, and, in extreme cases, even exclude the State’s power to
determine policy in certain socio-economic fields.”51
From a jurisprudential standpoint, however, the ECJ did not draw major consequences from
the relevant changes experienced in the transition from GATT to WTO and contributed to the
creation of a ‘sovereignty shield’52 for the EC/EU legal order in respect of GATT/WTO
legalization and of the judicialization experienced by the WTO settlement dispute system.
Prima facie, it seems to be a tension between the concept of sovereignty and the
jurisprudential doctrines espoused by the ECJ. However, assimilating the ECJ to a
protectionist court in respect of the influences of International Law on the Community legal
order enlightens a few aspects of its jurisprudential relationship with GATT/WTO law.
Generally speaking, domestic courts avoid implementing International Law when it
contradicts important policies of the executive of the polity in which they are embedded. In
order to do so, they adopt a series of techniques, centred around the incorporation of
International Law in a domestic piece of legislation, largely adopted in the jurisprudential
doctrine of the ECJ concerning WTO law.
III) Development of a Sovereignty Shield
The Court confirmed in Portugal v. Council53 that WTO law may be invoked only in the
exceptional circumstances already recognized in the case of GATT54. According to the ECJ's
established practice, “the WTO agreements are not in principle among the rules in the light of
which the Court is to review the legality of measures adopted by the Community
51
Arie Reich, “From Diplomacy to Law: the Juridicization of International Trade Relations”, Northwestern
Journal of International Law and Business 17 (1996-1997), pp. 776-77
52
Term used by the European Parliament Report, “Relationship between International Law, Community Law
and Constitutional Law of the Member States”, PE 220.225
53
C-149/96 [1999] I-8935
54
In International Fruit, the ECJ required that a GATT provision to be not only binding on the EC but also
“capable of conferring rights on citizens of the Community which they can invoke before the Courts. Schermers
criticized the Court for introduction an additional condition for the application of international law. Henry
Schermers, “Community Law and International Law”, Common Market Law Review 77:1 (1975), p. 80.
12
institutions”. Despite harsh criticism of such a general rule, the ECJ accepted exceptions only
in those limited circumstances where the EU intended to implement a particular obligation
assumed in the context of the WTO55, or where the EU measure refers expressly to the
precise provisions of the WTO agreements56. These exceptions are not clearly defined57 and
seem very limited58, fluctuating on a case-by-case approach.
The building of a “sovereignty shield” between WTO law and Community Law has
progressed in two different directions59. On the one hand, the unavailability of WTO law to
challenge Community Law either by States or individuals (A). On the other hand, the
impossibility to claim compensation under article 288(2) EC for damages provoked by the
EU negotiating and settling commercial controversies in the WTO framework (B).
A) General Invocability of WTO law
According to established case law of the ECJ, Member States cannot normally invoke WTO
law to invalidate Community Law. In cases brough by Member States to review the
lawfulness of Community measures, however, the reasons given by the Court are the same
for which it refuses direct effect60, establishing a parallelism in the case law between Member
States and private parties and maintaining it.
Somewhat confusingly, returning briefly to the logic of Kupferberg ruling in the realm of
GATT/WTO law, the ECJ declared admissible an infringement procedure brought forward by
the Commission against the German government61. In this case, the Commission brought
proceedings against Germany for having breached obligations under the EC Treaty resulting
from its failure to comply with the International Diary Agreement, concluded in the framework
of the GATT Tokyo Round. The action of the Commission was held by the ECJ on the basis of
the “general rule of international law requiring the parties to any agreement to show the good
55
C-69/89 Nakajima All Precision v. Council [1991] I-2069
C-70/87 Fediol v. Commission [1989] 1781
57
Both exceptions appear to be traditionally à la carte, in order to provide a convenient loophole at the
European Court of Justice to escape unpleasant consequences of its general line of jurisprudence on WTO law.
Steve Peers, “WTO dispute settlement and Community law”, European Law Review 25:5 (2001), pp. 605-615
58
In particular, the Nakajima exception seems to be applying almost exclusively to the field of anti-dumping
law, with limited possibilities of extension. Geert Zonnekeyn, “The latest on indirect effect of WTO law in the
EC legal order: The Nakajima case law misjudged?”, Journal of International Economic Law 4:3 (2001), pp.
597-608; Geert Zonnekeyn, “The ECJ’S Petrotub Judgment: Towards a Revival of the ‘Nakajima Doctrine’?”,
Legal Issues of Economic Integration 30:3, (2003), pp. 256-260
59
Armin van Bogdandy, Tilman Makatsch “Collission, Co-existence or Co-operation”, in Grainne De Burca,
Joanne Scott (eds), The EU and the WTO. Legal and Constitutional Issues (Oxford, Hart, 2001), pp. 131-150
60
C-300/98&C-392/99, Dior [1998] I-11307, para. 44-45 which refer to paragraphs 42-46 of C-268/94,
Portugal v. Council [1999] I-8395
61
Commission v. Germany 1994
56
13
faith in its performance”62. This has caused quite a stir amongst Member States and legal
scholars. In fact, as the case law stands, neither private parties/undertakings, nor Member States
can invoke WTO law against the Community and its institutions, while the European
Commission can invoke WTO law against Member States. This problem is not only interesting
from a theoretical angle, but also of practical significance. A good illustration is the situation of
Germany during the so-called “Banana-war” between the US and the EC. According to the US,
the EC regime on imports of Latin American bananas infringed WTO law because it was
harmful to the US company ‘Chiquita’. Germany challenged the regime too because the
interests of most German banana importers ran parallel to those of ‘Chiquita’. However,
Germany was outvoted in the Council, which decided by qualified majority, and it therefore
challenged the regime before the Court of Justice. The Court rejected the appeal and stated that
Germany could not invoke GATT/WTO law. In the meantime, the US successfully brought a
case in the WTO. Because the EC did not properly implement the WTO decision, the US
received permission to take retaliatory economic measures against the EC. Some private
undertakings, including German onces, were seriously affected by these US measures but they
were prevented by the ECJ’s ‘soveregnty shield’ to obtain a satisfactory answer in a judicial
forum. It is, to say the least, paradoxal to see that German undertakings were affected by
sanctions imposed against the EC for its violation of international law, knowing that Germany
had always made objections against the banana regime. It is also remarkable that the EC could
in fact force Germany to infringe its international obligations and that the Court de facto
refused to accept international economic law as a relevant reference in several cases arising
from the ‘banana saga’63.
This impossibility for private parties to invoke WTO law, even in presence of panel and
Appellate Body reports finding against the EU, has recently been developed and confirmed in
Van Parijs64, where it was stated that an individual does not have the right to challenge,
before a national court, Community measures at the light of WTO rules, even if the WTO
dispute settlement Appellate Body had previously declared the Community legislation to be
incompatible with those rules. In substance, this ruling reconfirmed and extended the cover
provided by Portugal v. Council to the discretionary powers of negotiation and settlement of
the European Union in the WTO context. Moreover, by the same token, the Court
acknowledges that the implementation of WTO obligations, in practice, may have to be
62
Ibidem, para 30
Davies, “Bananas, Private Challenges, the Courts and the Legislature”, Yearbook of European Law 21 (2002),
pp. 299-326
64
C-377/02 Leon Van Parijs v. Belgisch Interventie-en-Restitutie Bureau [2005] I-1465
63
14
reconciled with other international obligations65 and with the requirements of Community
policies66, although the ECJ recognised the binding nature of WTO agreements for the
Community as a whole with Biret67.
B) Liability for damages
With the latter ruling, the ECJ seemed, for a brief moment, to entertain the possibility of
granting direct effect to WTO rules on Community law, at least as action for damages under
Article 288(2) EC is concerned68. According to its ruling Biret International SA, the
European Court of Justice appeared prepared to admit that decisions of the WTO Dispute
Settlement Body (DSB) are capable of supporting a legal action invoking WTO law69. With
its finding of a potential liability of European institutions as a result of the WTO dispute
settlement process, the ECJ opened a new round in the debate over the effect of WTO law
within the European legal order. In accordance with the opinion of Advocate-General Alber
in this case, the ECJ did not rule out the possibility that the WTO rules may have a direct
effect, at least if the EU has indicated that it intended to comply with its WTO obligations as
established by the WTO dispute settlement bodies70.
Whereas the latter ruling opened a window of opportunity for a judicial dialogue between the
Court of Luxembourg and the Appellate Body of Geneva, at least in the area of damages for
“extra-contractual liability”71, the ruling FIAMM and Fedon slammed the door on it. To
curtail even further the impact of the WTO system law on the internal inter-institutional
equilibrium of the European political system, the ECJ has disregarded the arguments of its
Advocate-General Maduro in FIAMM and FEDON concerning the possibility of awarding
compensation for damages arising from “lawful conduct” of the Commission, exercising its
discretion in the general interest72.
65
Ibidem, para 49-51
Ibidem, para 52
67
C-93/02, Biret International SA v. Council [2003] I-10497
68
Armin von Bogdandy, “Legal Effects of World Trade Organization Decisions Within European Union Law:
A Contribution to the Theory of the Legal Acts of International Organizations and the Action for Damages
Under Article 288(2) EC”, Journal of World Trade 39:1 (2005), pp. 54-66
69
Delphine De Mey, Pablo Ibanez Colomo, “Recent Developments on the Invocability of Wto Law in the EC:
A Wave of Mutilation”, European Foreign Affairs Review 11:1 (2006), pp. 63-86
70
Ibidem, pp. 85-86
71
Mario Mendez, “The Impact of WTO rulings in the Community legal order”, European Law Review 29:4
(2004), pp. 517-529
72
Geert Zonnekeyn, “EC liability for non-implementation of WTO dispute settlement decisions: are the dice
cast?”, Journal of International Economic Law 7 (2004), pp. 483-490
66
15
IV) Assessing Judicial Activism in the External Trade Realm
As argued before, the degree of creativity employed by the Court in its decision-making is an
important element of its judicial activism, and is measured by negative reactions to it, in line
with Rasmussen analysis of judicial activism73 but only in respect of doctrine. Judicial
creativity was defined as the extent to which the ECJ departs from a generally accepted
reading of a text or previous case law as revealed by doctrinal reactions. Creativity in judicial
interpretation is measured in terms of the extent to which judgments reflect a ‘reasonable’
interpretation of the legal text, and the extent to which the case law reflects a consistent
reasoning on the basis of the original rationale. The more accepted and well received the type
of argument used by a court, the more ‘reasonable’ its interpretation is likely to be74.
On both accounts, the ECJ’s interpretation of the effects of GATT/WTO Treaties on the
Community legal order has been one of the most contested aspects of its jurisprudence on
International Law and Community Law75. It has often employed a creative approach, in
which it has looked not just to the words of GATT and WTO provisions but also to the
‘spirit’ of the treaties as the basis for its interpretation, to toe the line of Commission and
Council standpoints. To do so, however, the Court has treated differently GATT/WTO
treaties in respect of its more favourable interpretation of Free Trade Agreements established
with third countries by the EC/EU, all other things being equal76. Summarizing, the ECJ has
adopted a purpose-oriented approach to judicial interpretation in order to orient the
relationship of EU law with GATT/WTO law 77.
Because of this undue creativity and ad-hoc flexibility of the ECJ jurisprudence, lawyers and
scholars have been more sceptical than politicians and technocrats in respect of the
jurisprudential approach of the Court78. Over the years, critics have charged that the Court’s
73
J.W.R Reed, “Political Review of the European Court of Justice and its Jurisprudence”, Journal of European
Public Policy 13:1 (1995), pp. 1-20
74
Joxerramon Bengoetxea, Neil MacCormick, Lenor Soriano, “Integration and Integrity in the Legal Reasoning
of the European Cour of Justice” in Grainne De Burca, Joseph Weiler (ed.), The European Court of Justice
(Oxford, Oxford University Press, 2001), pp. 46-47
75
Pieter Jan Kuijper, Marco Bronckers, “WTO law in the European Court of Justice”, Common Market Law
Review 42:6 (2005), pp. 1313-1355; Francis Snyder, “The Gatekeepers: the European Courts and WTO law”,
Common Market Law Review 40:3 (2003), pp. 313-367; Piet Eeckhout, “Judicial Enforcement of WTO law in
the European Union – Some further reflections”, Journal of International Economic Law 4:1 (2002), pp. 91110; Piet Eeckhout, “The domestic legal status of the WTO agreement: interconnecting legal system”, Common
Market Law Review 34:1 (1997), pp. 11-58
76
Gerhard Pischel, “Trade, Treaties, and Treason”, European Foreign Affairs Review 6:1 (2001), p. 111-115
77
Iris Canor, “«Can Two Walk together Except Agreed» - The relationship between International Law and
European Law”, Common Market Law Review 35:1 (1998), pp. 183-184
78
Pieter Jan Kuijper, “The New Dispute Settlement System – The Impact on the European Community”,
Journal of World Trade 6:1 (1995), p. 63
16
treatment of GATT/WTO law was based on an unorthodox reading of International Law,
bordering on the treason of its mission of enforcing the rule of law79, and that it was an
expedient interpretation presented as principled exception80. Although the doctrinal debate
has been largely subdued by the fact that the Court’s interpretation has been largely accepted
and supported by the EU political instances, it has by no means been extinguished81.
However ‘reasonable’ its original rationale may or may not have been on the effects of
international agreements upon the European legal order, as exemplified by its ruling
Kupferberg, the Court has opted out of this mode of reasoning in its case law concerning
GATT/WTO law, without giving valid legal reasons82.
For such a treatment to be understood, underlying political reasons provide a more
convincing explanation than legal ones. In the eyes of the doctrine, the ECJ’s GATT/WTO
jurisprudence was deemed politically ‘reasonable’, given the structural constraints, but
legally flawed.
The granting of direct effect to GATT/WTO law leads to undesired effects, from the point of
view of the EU, both internally and externally. Externally, the bargaining position of the EU
is weakened as the room for negotiations is minimised by possibility of judicial enforcement
of unconditional rules and directly enforceable judgments both at the European and national
level, which amounts to conceding an asymmetrical advantages to commercial partners at the
global level. Internally, it leads to a loss of autonomy of the ECJ, resulting in the EU judicial
machinery becoming the implementing tool at the service of the WTO dispute settlement
process and putting into peril the institutional equiibrium.
From an external standpoint, the attitude of the ECJ can be resumed by the traditional
dilemma faced by domestic courts in face of International Law83. Domestic courts find
themselves in a conundrum when considering the possibility of implementing International
Law at the expenses of their own executives. In order not to put the latter to a disadvantage
vis-à-vis other partners, the courts must assume the same conditions for other executives. On
79
Kees Jan Kuilwijk, The European Court of Justice and the GATT dilemma (Portland, International
Specialized Book Service, 1996), p. 42
80
Ibidem, p. 159
81
Nikolaos Lavranos, “The Communitarization of WTO Dispute Settlement Reports: An Exception to the Rule
of Law”, European Foreign Affairs Review 3 (2006), pp. 313-338
82
Steve Peers, “Fundamental Rights or Political Whim? WTO law and the European Court of Justice” in
Grainne De Burca, Joanne Scott (eds), The EU and the WTO. Legal and Constitutional Issues (Oxford, Hart,
2001), pp. 111-130
83
Eyal Benvenisti, “Exit and Voice in the Age of Globalisation”, Michigan Law Review 98:1 (1999), pp. 167213
17
the one hand, since all major negotiating partners of the EU in the WTO framework do not
recognise direct effect to it, except South Korea, the prospect of unilateral concessions
without reciprocity will have bound the EU legislative and executive bodies by the
Community’s effective legal system. On the other hand, the Uruguay Agreement establishing
the WTO neither provided for nor suggested direct effect of its provisions84. WTO
membership in itself does not imply to carry out any obligation in this respect85.
As a consequence, the multilateral nature86 of this institutional framework makes it more
rational for the ECJ to develop its ‘sovereignty shield’ jurisprudence, in order for the EU to
exercise its economic power in a more effective way. Furthermore, given the high complexity
of issues dealt with in the WTO and its extensive membership, diplomatic freedom of
manoeuvre is essential to exercise an effective influence in the matter submitted to litigation
and settlement negotiations. Because of the sheer number of area covered and the vast
number of disputes about obligations flowing from GATT/WTO law, only flexibility can
provide for effective management of the complexities of the global trade regime. This amount
to the traditional argument that foreign policy is best left at the discretion of the executive,
without interferences due to judicial review.
From the internal viewpoint, the ECJ has also moved closer to a restrained position
concerning the respect of EU institutional equilibrium, in respect of its historical position. In
comparison with Kupferberg, where it posited itself as the ultimate arbiter of issues relative
to the interpretation of international agreement, the ECJ has rediscovered the virtues of
deferring to executive and legislative bodies, in order to maintain the institutional
equilibrium87. This move has meant a certain degree of confusion between monist and
dualist, in order to avoid clashes with important policies of the executive bodies, which has
brought some authors to question the heuristic recourse to monist or dualist theorist to frame
the issue of the relationship between EU and International Law88.
84
Meinhard Hilf, “The Role of National Courts in International Trade Relations” in Ernst-Ulrich Petersmann
(ed.), International Trade Law and the GATT/WTO Dispute Settlement System (The Hague, Kluwer Law
International, 1997), pp. 559-585
85
Thomas Cottier, Krista Schefer, “The relationship between World Trade Organization, National and Regional
law”, Journal of International Economic Law 1:1 (1998), pp. 89-91
86
John R. Ruggie, “Multilateralism: The anatomy of an institution” in John R. Ruggie (ed), Multilateralism
Matters (New York, Columbia University Press, 1993), pp. 3-4
87
Meinhard Hilf, “The ECJ’s Opinion 1/94 on the WTO, Journal of International Economic Law (1995), pp.
245-247
88
For an analysis of the oscillations between monist and dualist interpretations of the ECJ jurisprudence, see Jan
Klabbers, “International Law in Community Law: the Law and Politics of Direct Effect”, Yearbook of European
Law 21 (2002), p. 263
18
Despite its promotion of judicial guarantees for individual rights at the European level, the
ECJ identifies its institutional interest with the promotion of the EU executive autonomy on
the global stage. This is even more evident as it regards the integrative or disintegrative added
value of International law in respect of the effectiveness and scope of Community Law and,
accessorily, of the independence of jurisdiction of the ECJ is crucial. Where the ECJ has been
inclined to accept direct effect of international provisions, the EC had mostly negotiated the
agreements alongside the lines of bilateralism. Whereas many of the cases involving
international agreements, upheld by the ECJ, challenged national legislative acts and
weakened the external competences of Member States in favour of the powers of European
institutions89.
The sum of these different strands of motives underlying the ECJ’s jurisprudence is that the
supporters of the application of International Economic law have not been able to rely on the
European courts to enforce WTO law against the constituted interests at the basis of the trade
policy of the European executive. The ECJ, in particular, has showed its utmost respect for
the preferences of the executive (Commission) and legislative (Council) branches
determining EU trade policy90, which is arguably one of the most important tool in the
supranational area of competences. Generally speaking, the Court tends to favour a broad
reading of the International law and Treaties texts, in order to build a strong, integrated
supranational legal order. It used, however, a much more pragmatic approach for trade
relations, which exhibits marks of creativity in respect of its own case law, such as denying
the direct effect of WTO law at the light of the ‘spirit’ of the WTO agreement, but also
showed restraint in issues not expressly covered by the EC Treaties, as in the question of EU
competence to enter in the WTO.
On the one hand, ECJ decision-making is not immune to broader institutional developments
and/or political trends and pressures in the EU91. The ECJ has appeared less willing to take a
broad interpretation of matters concerning the bounds of EU competences in the external
realm. In its Opinion 1/94 concerning the division of powers between the EC and its Member
States to conclude the WTO Agreements, the Court of Justice stated that “(w)here it is apparent
that the subject-matter of an international agreement or convention falls in part within the
89
Paul Craig, Grainne de Burca, EU Law: Text, Cases, Materials 3rd Ed. (Oxford, Oxford University Press,
2002), p. 182
90
Sophie Meunier, Trading Voices: The European Union in International Commercial Negotiations (Princeton,
Princeton University Press, 2007), pp. 21-40
91
Meinhard Hilf, “ECJ’s Opinion 1/94 on the WTO. No Surprise but Wise?”, European Journal of
International Law 6:1 (1995), pp. 245-259
19
competence of the Community and in part within that of the Member States, the requirement of
unity in the international representation of the Community is such that it is essential to ensure
close cooperation between the Member States and the Community institutions, both in the
process of negotiation and conclusion and in the fulfilment of the commitments entered into”92.
The Court refused to construe the external competences of the EU in the direction indicated by
the Commission. At the time of Opinion 1/94, just before the entry into force of the WTO
Agreements, the Legal service of the Commission stated that if the Court came to the
conclusion that the EC did not have exclusive competence for all WTO matters, this would
result in chaos in the EC representation in the WTO. The Member States would “undoubtedly
seek to express their views individually on matters falling within their competence whenever
no consensus has been found”93.
On the other hand, the study undertaken reveals the central importance of the ECJ’s
relationship with the Commission. In its case law, neither private parties, nor Member States
can invoke WTO law against the Community and its institutions, while the European
Commission can invoke WTO law against Member States. This has caused quite a stir amongst
Member States and legal scholars. This commotion is even intensified by the fact that the
Member States are members of the WTO and therefore have obligations, while these States, in
the context of the EC, do not enjoy more privileges than private parties. It remains to be seen to
what extent the Court is going to enforce a more general tightening of judicial control over
Commission negotiating powers in the context of the WTO. In fact, the practice followed by
the EC in the WTO seems to be rather supranationalist: although every Member State has the
right to attend WTO meetings, it is only the European Commission that represents the entire
EC. This is not only the case for those aspects of external trade for which the EC enjoys
exclusive competence, but also for those aspects for which the EC shares competence with the
Member States (such as trade in services and international rules concerning the protection of
intellectual property rights).
92
Opinion 1/94 [1994] I-5267
Ibidem, para. 106. Takis Tridimas, Piet Eeckhout, “The external competence of the Community and the case
law of the European Court of Justice: principle versus pragmatism”, Yearbook of European Law 14 (1994), p.
173
93
20
Conclusions
The central aim of this study was to determine to what extent and how the ECJ has been
activist in the realm of external trade relations of the EU, promoting its own preferences
against its political constituency. The answer is broadly negative.
In fact, the judicial appreciation of the effects of GATT/WTO law on the European legal
order has shown that the ECJ has self-restrained strongly its interpretative role. Particularly
obvious was the expedient avoidance of questions put to its jurisdiction, in order to protect
the discretion enjoyed by the executive bodies in the framework of the WTO and to preserve
the autonomy of the European legal order in respect of interferences coming from outside
jurisdictions as the WTO dispute settlement system94. The Court’s controversial refusal of
direct effect to WTO law, and its elaboration on the principles of indirect effect of WTO law
and extra-contractual liability of European executive bodies, significantly strengthened the
EU externally in the WTO context, but at the price of a prolonged debate about the political
constraints behind its decisions.
In the long term, it can be argued that the line of interpretation taken by the ECJ in the cases
of the GATT/WTO law weakened its legitimate standing as a judicial body in the eyes of
lawyers. As an author as Cappelletti put it:
“What makes a judge a judge and a court a court is not non-creativity but rather (1)
the connection of adjudication with cases and controversies, hence with ‘parties’, and
(2) the impartial attitude of the adjudicator, who must not judge in re sua, who must
assure a fair hearing with the parties…and who must be assured a degree of
independence from outside pressures, especially those coming from the ‘political’
branches.”95
At the light of those different aspects of judicial legitimacy, the ECJ has failed this test, by
adopting a double standard concerning the respect of International law, according to its
positive or negative impact on the integrity of Community law. In fact, its judicial decisions
have been biased in order to achieve the most desirable effects for the Community legal order
and its supranational developments, on which the ECJ has a vested interest, by deploying a
number of techniques meant to build a ‘sovereignty shield’ around the EU operating in the
94
95
Mauro Cappelletti, “The ‘Mighty Problem’ of Judicial Review and the Contribution of Comparative
Analysis”, Legal Issues of European Integration 2, 1979, p. 23
21
context of the WTO and to deflect legal challenges brought to the attention of the ECJ. One
could summarize that the ECJ was not consistent with its case law on the effects of
international agreements concluded by the European Communities96 as it seemed to be
devising ad-hoc arguments to deny direct effect to WTO rules to sidestep controversies
coming in its judicial forum97, changing parameters to refuse application of the same rules to
the parties referring those controversies98 and referring to the discretion of the political
branches to protect its own jurisdiction and its own gatekeeper role99. Even if the doctrine
highlighted these contradictions in the reasoning of the Court, however, these failings were
justified in the name of political circumstances and Community interest at the expenses of
legal certainty and coherence. Such an outcome is reminiscent of the collusion between
judges, lawyers and legal experts of the beginnings of the integration process to cover the
creative interpretations which gave way to the ‘transformation of Europe’100.
96
Meinhard Hilf, “The Role of National Courts in International Trade Relations” in Ernst-Ulrich Petersmann
(ed.), International Trade Law and the GATT/WTO Dispute Settlement System (The Hague, Kluwer Law
International, 1997), p. 574
97
Piet Eeckhout, “WTO Dispute settlement and Community law”, European Law Review 26:3 (2001), pp. 605615
98
Lode van den Hende, “The EC as a Collective Member of the WTO: What role for the European Courts?” in
Koen Byttebier, Kim Van den Borght, WTO Obligations and Opportunities: Challenges of Implementation
(London, Cameron May, 2008), pp. 261-274
99
Francis Snyder, “The Gatekeepers: the European Courts and WTO law”, Common Market Law Review 40:3
(2003), pp. 313-367
100
Harm Schepel, Richard Wesseling, “The Legal Community: Judges, Lawyers, Official and Clerks in the
Writing of Europe”, European Law Journal 3:2 (1997), pp. 165-188; Antoine Vauchez, “Une élite
d’intermédiaires: genèse d’un capital juridique européen (1950-1970)”, Actes de la Recherche en Sciences
Sociales 1-2, 2007, pp. 54-65
22